Determinanty výnosnosti evropského bankovního systému v letech 2012–2019
Determinants of European Bank Profitability in 2012–2019

Summary/Abstract: This paper aims to find the microeconomic and macroeconomic determinants of Europeanbank profitability from 2012 to 2019 using the regression model with the multicollinearitycondition as a matrix parameter, the multicollinearity below the defined value, ensuringregression model reliability. The bank sector profitability is measured by return of averageequity, return of average assets and net interest margin as dependent variables. The researchcreates a set of independent variables based on a literature review. The model is builton a sample of 3,257 European commercial banks for all EU countries excluding Romaniadue to missing data, and the input data were obtained based on the Orbis Focus Bank andthe World Bank Database. The results revealed that the cost to income ratio and loan lossreserves to gross loans are the most important determinants of profitability of Europeancommercial banks as measured by return of average assets. The results also show thatGDP growth rate, inflation measured by the consumer prices and loan loss reservesto gross loans are the most important determinants for the net interest margin indicator.We recommend that commercial banks optimize the cost structure, create sufficientreserves, monitor the process of digital transformation and monitor credit risk indicators.

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